Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [9]. Core Insights - The company is a leading player in solid waste disposal in Hunan, with operational waste incineration capacity of 10,600 tons/day and an additional 2,200 tons/day under construction by the end of 2024 [2][4]. - The company has a strong focus on stable dividends, with a payout ratio of 79.2% in 2022 and 71.8% in 2023, supported by robust cash flow [2][8]. - The acquisition of Renhe Environment enhances the company's front-end collection and kitchen waste processing capabilities, with a commitment to maintain stable profit contributions [7][8]. Company Overview - The company specializes in waste incineration, sludge disposal, leachate treatment, landfill, and ash disposal, completing the acquisition of Renhe Environment in November 2024 to enhance its service offerings [4][18]. - The company operates in a growing market, benefiting from the economic stability and population growth in Changsha, which supports increased waste processing volumes [38][42]. Operational Efficiency - The company's waste incineration projects in Changsha have achieved high operational efficiency, with a capacity utilization rate of 88.6% in 2023 and a net profit margin of 46.6% [4][43]. - The company is expanding its operations in Hunan and internationally, with projects in Pingjiang and Liuyang expected to contribute to revenue growth by 2025 [5][6]. Financial Performance - The company forecasts a steady increase in net profit, projecting figures of 5.43 billion, 7.37 billion, and 7.75 billion yuan for 2024-2026, with corresponding year-on-year growth rates of 5.7%, 35.7%, and 5.2% [9]. - The company maintains a strong cash flow position, with operating cash flows of 8.7 billion yuan and 4.3 billion yuan for the company and Renhe Environment, respectively, indicating ample funds for dividends [8][27]. Market Position - The company holds a significant market share in Changsha, managing all municipal waste and a large portion of municipal sludge, which provides a competitive advantage in the region [20][38]. - The company is also expanding its overseas operations, with a project in Bishkek, Kyrgyzstan, that has a planned incineration capacity of 1,000 tons/day [6][20].
军信股份深度：湖南固废处置龙头，纵横一体化持续深入+稳健分红